Egyptian parliamentary committee approves $12 billion IMF loan

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Written by Mahmoud Aziz | Ahram Online

Published: March 16, 2017 9:46 PM

An Egyptian parliamentary committee on Wednesday approved the country's three-year $12 billion loan agreement with the International Monetary Fund, which will next be voted on by the whole legislature.

The constitutional and legal affairs committee approved the agreement after 31 members voted in favour, five against, and one abstained, state news agency MENA reported.

The Central Bank of Egypt received an initial $2.75 billion tranche of the loan in November, following the IMF board’s approval of the agreement.

During Wednesday's parliamentary session, Minister of Finance Amr El-Garhi said that all the documents related to the agreement are available for review by MPs.

El-Garhi told Reuters on Wednesday that a delegation from the IMF will visit Egypt from 28 April 28 to 8 May.

The IMF said last month it planned to complete its first review of Egypt's economic reform programme around June this year.

Parliamentary speaker Ali Abdel-Aal described the agreement as a part of a comprehensive economic reform programme, highlighting Egypt's right to borrow from international monetary organisations like any other country in the world.

In mid-August 2016, Egypt reached a staff-level agreement with the IMF over the $12 billion loan to endorse the country’s fiscal reform programme, which the government embarked on in 2014 in an attempt to curb the growing state budget deficit, estimated at 12.2 percent of GDP in 2015/16.

The fiscal reform programme included the floatation of the Egyptian pound.

The government hopes the loan will jumpstart the Egyptian economy, which has been battered by years of turmoil that have driven away investors and tourists.

Egypt’s foreign reserves reached $26.54 billion by the end of February 2017, up from around $26.36 billion in January, the CBE said.